IS ULIP a Lucrative Investment Option?

IS ULIP a Lucrative Investment Option?

When we talk about investment, then there are plethora’s of investment options available in the market. However, choosing a lucrative investment option always seems to be a herculean task for most of the individuals. Among different types of investment options available in the market, ULIPs are considered as one of the worthwhile investment option as it provides the dual benefit of investment cum insurance. As a market linked products Unit Linked Insurance Plans combine both insurance and investment. The ULIP investment plans allow you an opportunity to earn market linked returns as well as provide a life cover. ULIP plans are the best investment option for those buyers who want to avail the combined benefits investment cum insurance backed up by flexibility.

As per the risk appetite, the ULIP plans link to the capital market and provides flexibility to invest in depth or equity. The unit linked insurance plans are amongst the most productive option to choose for investment. As a long term investment options, there are several reasons why ULIP investment plans are beneficial.

Benefits offered by ULIP’s that makes them a profitable investment option

ULIP plans are most transparent in nature.

These plans offer great features in minimum charges.

ULIP plans provide flexibility to switch over funds.

It has different premium paying frequency.

ULIP’s offers rider options for additional coverage.

Tax benefit under section 80C, 80D and 10D.

Here we have discussed briefly some of the points, to validate the benefits offered by ULIP plans.

Offers a choice of Numerous Investment Options is

Based on the risk appetite of the customers, ULIPs provide a range of investment options. According to one’s own preference, you can choose to invest your money in-depth funds or in pure equity market or a combination of both. Along with a wide choice of investment, it also provides you with an opportunity to switch between fund options without any additional expenses. The flexibility to choose the investment ratio and the sum assured is provided by ULIPs in the annual targeted premium.

Reliability

ULIP plans are extremely transparent in nature. Before buying the product the value of the investment, the charge structure and the expected IRR based on 4% and 8 % rate of return, for the complete term of the policy are shared with the customers. The insured can know how and where their money is invested and can also track their portfolio performance. Moreover, you can also get time to time updates about all the applicable charges as well as the net investment amount with the help of ULIP calculator.

Flexibility

Most of the ULIP plans provide an option to choose the desired life cover and premium amount of the plan. Moreover, the policy buyers also have the flexibility to choose between equity and depth. Besides this, most of the insurance companies allow a certain number of free switches. In order to provide maximum returns on investment to the investors, ULIP plans also offers top-ups.

Liquidity

To deal with any type of emergency circumstances and unforeseen situation, an advantage of partial withdrawal is offered, under which, the policyholder can make a withdrawal after five years from the unit linked account retaining only the specific minimum amount. The insured can also surrender the policy without any additional cost or charges in a case of any emergency.

Tax Benefit

An investment up to Rs1,50,000 is exempted from tax deduction under section 80C and the proceeds which will be received on maturity will be tax-free under section 10D of income tax act.

Disciplined and Regular Saving

Unit Linked Insurance Plans helps to inculcate the habit of regular saving. Moreover, the average costs of unit have a tendency to be lower as compared to one-time investment. For a long term investment, ULIP investment plans are an outstanding financial solution. It provides the benefits of various investment opportunities along with the tax benefits.

Helps to Achieve Financial Goals

ULIPs offer a choice to the customers to invest on wide range of investment instruments like bonds, mutual funds, stocks as well as insurance cover. The dual benefit of life coverage along with the freedom to select your investment option makes ULIPs a lucrative financial instrument among customers.

Investing in ULIPs is extremely beneficial as it not only provides life protection to the insured but also offers them an opportunity to invest money and gain profitable returns. The ULIP plans are ideal in order to achieve the financial goals.

In simple words, ULIP can be described as an expert fund management that offers different investment strategies to multiply the fund options of an individual. With its versatile features and uniqueness of providing the triple benefit of high return, life cover and tax saving with minimum risk of losses ULIP is certainly one of the best investment tools to achieve the long-term financial goal.